Raising fears about the staying power of the Bay Area economy, the region added just 2,500 jobs in May, a sharp slowdown from gains averaging 10,000 a month over the previous four months.
Blaming the deepening recession in Europe and the economic slowdown in Asia, Scott Anderson, a senior economist with Wells Fargo Bank, said: "There is a deceleration in job creation. That would be consistent with some of the weakness we are seeing in the national employment numbers."
In May, the South Bay added 1,500 jobs, while the East Bay's employment market nose-dived and shed 5,000 jobs, according to seasonally adjusted figures released Friday by the state Employment Development Department. The strongest region in the Bay Area was the San Francisco-San Mateo-Marin area, which added 4,200 jobs in May, the EDD reported.
Those numbers were down sharply from the first four months of the year, when the Bay Area added jobs at an average rate of 10,000 a month. And the latest numbers were far below 10,500 jobs a month the Bay Area posted over the five months that ended in December.
The big question about whether the slowdown will continue or job growth will restart is the tech sector, which has contributed heavily to job growth in the past year. Despite May's pessimistic report, some experts remain hopeful.
"The structure of the South Bay economy lends itself to the surge in business investment we have been seeing nationwide," said Jordan Levine, director of economic research with Beacon Economics. "Silicon Valley and the San Francisco market are all set up to leverage that business investment trend."
The East Bay has technology clusters in Fremont, the Pleasanton-Dublin-San Ramon region and Oakland, but lags behind its neighbors for tech jobs.
"The East Bay does not have enough concentration of the tech sector to get the growth you see in other areas," Levine said.
The weakest sectors in the East Bay were construction, which lost 1,100 jobs and government, down 900. But analysts said the downturn might only be temporary.
"I don't think it is the start of a new downward trend," said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at University of the Pacific. "But it's more evidence of how the East Bay economy has struggled to achieve consistent growth."
California overall added 39,000 jobs in May, EDD officials reported. The statewide jobless rate improved to 10.8 percent, down from 10.9 percent in April.
The jobless rates in the Bay Area's three largest urban centers were unchanged last month at 9.3 percent in the East Bay, 8.6 percent in the South Bay and 7.2 percent in the San Francisco-San Mateo-Marin metro area.
"Job growth has begun to slow a bit," said Jon Haveman, chief economist for the Bay Area Councils' Economic Institute. "But outside of the East Bay, the growth remains pretty solid in the South Bay and the San Francisco area."
With tech lagging, the strongest industries in the South Bay in May were construction, which added 1,000 jobs, and health care, which gained 800, according to a Beacon analysis of the EDD report.
In the San Francisco-San Mateo-Marin region, the strongest sectors were professional, scientific and technical services, which added 1,000 jobs -- a reflection of ongoing strength in the tech field. Some experts worry that Facebook's long-anticipated but disappointing initial public offering could put a damper on the startup economy, but economists said any impact from the IPO hasn't shown up in the job trends to this point.
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